As a businessperson you wish for things to be straightforward with your customers. You provide service; you get paid; period. However, customers are likely to delay payments. So, what is to be done?
Some of the most common and known properties of an invoicing include invoice details, payment terms, product catalogues etc. But are you taking some extra measures in ensuring nothing goes amiss, like setting up late fees or early payment discounts, getting customer feedback, sending proforma invoices, or sending reminders and following up? Does your invoice look professional? Everything put together, you mitigate the possibilities of delayed payments and increase cash flow.
Read in detail the golden rules of great invoicing.
With an online GST accounting software, like Surf Accounts India, and you can rest assured that your invoices are in safe hands. Simply choose data that your system already stores, such as the customer name, or quotes/orders on a customer, to have the associated details auto populated. Crucial data such as customer codes, invoice number are automatically generated. Even if you enter an invalid data, the system would produce an alert message.
Include a complete breakdown of the items delivered, or milestones achieved. A transparent invoice has a high chance of getting cleared on time owing to its easy decipherability. It reinforces your honesty as a business and leaves the customer a scope to ask questions if any.
Depending on your service you might want your customer to pay within 7 days or 30 days of raising an invoice. Whatever it might be, laying out clear payment terms and conditions on an earlier date (preferably on the closing of a negotiation) helps your customers be aware of the due date from beforehand, thereby improving the chances of getting paid on time.
Late fees and Discounts
To encourage timely payments, add a small discount in your invoices in the case of early payments and charge your customers late fees for missing the due date. However, the latter should not come as a surprise to your customers. Include these points in your business contract so that your customers can take a note of them from beforehand.
Imagine you raise an invoice and your customer denies payments on grounds of unsatisfactory services. Would you let all your efforts go to waste? To avoid a situation like this, get customer feedback for milestones achieved as your big project progresses and for tangible products ask for customer reviews as soon as they are delivered.
Does your delivery involve custom or shipment charges? Make your customers aware of these from beforehand by sending them a proforma invoice. Without it your customer might refrain from paying these fees on grounds of being charged extra.
Your customers are busy bees just like you and chances are they are receiving a hundred invoices daily. So, it is not impossible for your invoice to escape their notice. A gentle reminder before the payment due date improves your chances of receiving timely payment.
It’s well past the due date and you still have not received payments. What do you do? Send a gentle follow up mail or call your customer and ask them politely about the status of your invoice. You can use an online invoicing software to identify and track overdue invoices and take immediate corrective steps.
Are you preparing invoices that are plain black and white? Creating appealing designs for your invoices won’t increase the figure your customer owes you, but certainly they would notice the professionalism and effort that have gone in. Customise and stylize templatised layouts using Surf Accounts for your different customers.
Are you ensuring your invoices bear your business logo? Without a brand logo you might fail to establish your professional identity among customers. So, let your invoice be a representative of your brand.